[Therefore, the ruling elites of Nepal should
not put the vital interest of the country at risk by overlooking the
geo-economic and political realities of the regions. Situation might not remain
the same if Lakshman Rekha is crossed. Euphoria created by the media might not
last long as Nepal and its peace loving people have not achieved anything
tangible from the new deal.]
By Hari Bansh Jha
The ruling elites of Nepal should not put the
vital interest of the country at risk by overlooking the geo-economic and
political realities of the regions. Situation might not remain the same if
Lakshman Rekha is crossed. Euphoria created by the media might not last long as
Nepal and its peace loving people have not achieved anything tangible from the
new deal. Moreover, if India feels that its sensitivities have been ignored, it
could think of re-evaluating its relations with Nepal on the basis of merit and
not on emotions, which would be detrimental to Nepal’s health
Recently, Nepal and China signed ten agreements, including on trade and
transit, transportation, energy, and supply of oil from China to Nepal. The
country’s ruling elites have hailed the agreements as a major breakthrough in
Nepal-China relations. But the people on the ground are highly sceptical and
are apprehensive about its unwanted impact on socio-economic and security
situation of the country. At the time of political instability, the growing
controversies over the issue are a matter of concern for the common Nepalese
people.
By signing trade and transit agreement with
China, Nepal has got right to access to the Chinese seaport in Guangzhou. With
this development, the country will now be able to trade with third countries
through this port. Hitherto, Nepal had to rely solely on Kolkata port of India
for the purpose.
However, the distance between Nepal and
Guangzhou port is over 3,000 kilometres, which is more than three times the
distance between Nepal and Kolkata port. It is, therefore, likely that the time
and transport cost of carrying goods between Nepal and Guangzhou would be
exorbitant. Hence, it is doubtful if any sensible business persons would ever
think of doing trade with China or with third countries via the Guangzhou port
when they have every option available to do the same via Kolkata port.
Moreover, Kolkata port is already connected
with Birgunj Dry Port of Nepal through the Indian Railway network, while the
Chinese port of Guangzhou does not have proper roadways to connect to Nepal.
This is one of the major factors why bulk of Nepal’s trade even with China is
not carried out through the land route between Nepal and Tibet but through the
Kolkata port.
Additionally, none of the trade points
between Nepal and Tibet at present is in operation. The Tatopani-Khasa trade
point has been closed for a year. Road connecting this place with Kathmandu was
severely damaged during the deadly earthquake of April 25 last year in Nepal,
and it is yet to be re-constructed. Another trade point of Kerung-Rashuwagadhi
is in bad condition. It is full of risk to ply transport services on it.
A few months back, the drivers of the oil
tankers complained of the risk to their life while they were transporting oil
from Kerung-Rasuwagadhi trade point to Kathmandu. Such a pathetic picture of
the trade routes between Nepal and Tibet is an indication of apathy of the two
Governments for the resumption of the roads between the two countries, which
limits the scope of trade through the Chinese territory.
On top of this, there is a feeling that the
Chinese Government might not be in favour of greater movement of people through
the Nepal-Tibet border in view of the free-Tibet movement activities in Nepal
and other parts of the world. Even in the normal situation, the border between
Nepal and Tibet is kept closed off and on. At times this creates insurmountable
problems to the border inhabitants of the two countries who depend heavily on
each other’s market for meeting the daily requirements. In such a situation,
there is no guarantee of smooth supply of goods from one side of the
Nepal-Tibet border to the other for trade with third countries through the
Guangzhou port as the prospect of movement of people between the two countries
is most likely to grow with the growth in trade.
In the existing situation, Nepal will not be
in a position to benefit from the agreement for the import of oil from China if
the condition of the roads between Nepal and Tibet is not improved. Moreover,
it is well known that China produces only a minimal portion of oil that it
consumes. It also has to depend on third countries to meet its requirements for
oil. As such, even if China supplies oil to Nepal, it will prove costlier than
importing from India on account of the geographical factor. During the time of
recent economic blockade, Nepal tried to import oil through China. But it
failed to do so because the deal was not economically viable.
Now with regard to Chinese plan to extend its
train from the Nepal-Tibet border point to Kathmandu, Pokhara and further to
Lumbini in the Terai region of the country, China has agreed to conduct
feasibility study. Extension of the Chinese railway to the Nepalese territory
is possible only after 2020 when the Chinese train reaches closer to Nepal-Tibet
border at Kerung.
There is very little for Nepal to cheer from
the railway project even if it is constructed. Prospects for Nepal to export
goods to China are bleak. So it will be only the Chinese goods that could flood
Nepal. With the growing imports and shrinking exports, the gap in balance of
trade between the two countries could worsen further. But the goods imported
from China to Nepal could be smuggled to India to the great embarrassment of
Indian authorities.
Moreover, experts believe that China has its
own limitations in undertaking mega projects like the construction of railways
in Nepal as it demands heavy investment in the hilly terrain of the country.
Presently, China is in grip of major economic recession, which is not likely to
be revived any time soon. It is on this account that it is keeping its hands
off from investment in mega projects, especially in foreign countries.
There is a lot of hue and cry within the
country against heavy investment abroad. In such a situation, Chinese railway
project in Nepal might be in limbo.
But given China’s growing ambitions in its
neighbourhood, it cannot give up its plan to extend its railways deep inside
the Nepalese territory so easily. Once the economy in the country revives,
China might like to make its inroads into the Nepalese territory through the
railways because it provides a great strategic advantage to it over both Nepal
and India.
In due course of time, thousands of Chinese
workers, engineers and people related to other wings would be engaged in the
railway construction project. Those people are bound to make deep rooted impact
on social, religious, economic and political structure of the country as they
have been doing so in Africa and other regions of the world. Possibility of
Nepalese politicians to get easily influenced by those people is high.
Experience shows that the Chinese working in Africa and other countries have
not returned to their country and so there is tremendous growth in the number
of China towns.
Most significantly, it is not known if Nepal
has considered Indian sensitivities at all while making agreements with China.
India seems to have taken this issue seriously, which is quite clear from the
statement made by the spokesperson of India’s Ministry of External Affairs.
India might not be comfortable if China starts working in different projects in
Nepal, particularly in its backyard in Terai. Even in the past, it was under
the Indian pressure that Nepal had to cancel the agreement with China for the
construction of 22 bridges of the East-West Highway in the western Terai
region. In case India feels that its sensitivities have been ignored through
the Nepal-China agreements, it could think of re-evaluating its relations with
Nepal. Today there is entirely a new breed of people in Indian establishment who
might deal its neighbours like Nepal on the basis of merit and not on emotions
as it used to happen in the past.
Therefore, the ruling elites of Nepal should
not put the vital interest of the country at risk by overlooking the
geo-economic and political realities of the regions. Situation might not remain
the same if Lakshman Rekha is crossed. Euphoria created by the media might not
last long as Nepal and its peace loving people have not achieved anything
tangible from the new deal.
(The author is Executive Director of Centre
for Economic and Technical Studies, Kathmandu, Nepal)
